How will Aldi expand to online grocery in Australia?

The company has expressed plans to launch an online service to sell alcohol.

With online grocery set to drive around 50% of net new grocery sales between 2020-22 in Australia, and Metcash having launched new online grocery platforms in 2020, IGD has offered some potential options for Aldi for when it launches its own service.

First is an online liquor service. The business previously operated one from 2013 until March 2016, when it was terminated so that it could focus all of its attention on its expansion into South and Western Australia.

“With Woolworths and Coles both reporting record growth in online sales and penetration of the channel, according to our data, set to hit 5.0% of market sales by the end of 2022, Aldi must be considering its next move,” IGD’s head of insight in Asia Pacific Nick Miles said.

Speaking to News Corp, CEO Tom Daunt said that launching an online service was an inevitable growth area and would likely start with Aldi selling alcohol and its Special Buys non-food products online, opposed to its full grocery range.

Second is to figure out an efficient and standardised solution. As driving a profit from online grocery services is a major challenge, Aldi has been steady and cautious in its approach to take the plunge and launch online in Australia, the report stated.

“Its operating model is also built on consistent international standards and therefore having a uniform solution that can be deployed successfully and efficiently, but flexed, across all markets will be key,” Miles added.

Already, Aldi Süd, which Australia is part of, is rolling out a globally uniform IT system across its 20 countries, which will help its growth into online grocery. It has also brought together Aldi Nord and Aldi Süd to look at how to roll out a standardised solution for ecommerce.

Third, with both click & collect and third party delivery offering more efficient ways to fulfil online orders and discounters general adoption of these methods, Aldi could likely replicate this activity in Australia in the near future.

The business launched an online service in the UK last April offering food packages, this was followed by signing a partnership with Deliveroo to fulfil orders from 120 stores and then a click & collect solution that was rolled out to 200 stores by the end of January.

Meanwhile, Aldi and Lidl across Europe have been testing other third party delivery partnerships in Hungary, Ireland, Spain and Italy. In the US, Aldi now offers same day delivery from over 2,000 stores via Instacart. Click & collect (called Curbside) was introduced last summer at 600 stores, with plans to expand to 1,200 stores by the end of 2021.